London (Parliament News) – The EU has imposed tariffs on Chinese electric vehicles, dismissing trade-war concerns. China seeks a resolution, while European carmakers warn of potential industry impacts.
The EU’s top trade administrator, Valdis Dombrovskis, has skimmed aside worries of trade-war retaliation from Beijing against European business after the European Commission levied duties on Chinese electric vehicles.
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Dombrovskis, a European Commission vice-president, said that talks with China were continued, adding: “We are not seeing the basis for retaliation as what we are conducting is indeed in line with WTO [World Trade Organization] rules.”
Temporary tariffs on Chinese EV imports to the coalition ranging from 17.4% to 37.6% will apply from Friday after the two sides failed to achieve an agreement on what the EU leader called “unfair” subsidies from Beijing. These tariffs – far softer than the 100% tariffs levied by the US – will come on the lid of the EU’s current 10% duty on electric vehicles from China.
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Europe’s largest carmaker, Volkswagen, reiterated its objection on Thursday to the commission’s suggested tariffs on EVs made in China, arguing that they would not support Europe’s car industry in the long term. Volkswagen, which is wrestling with falling market share in China, has previously cautioned of retaliation from Beijing. “The timing of the EU Commission’s decision is detrimental to the current weak demand for [battery electric vehicles] in Germany and Europe,” the company stated on Thursday.
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Stellantis, proprietor of brands including Citroën, Fiat and Vauxhall, has stated it will not take a defensive stance in the fight for electric car sales and prefers to “fight to stay competitive”.
The tariffs are the outcome of an ongoing EU investigation established last October, which found Chinese producers profited from subsidies at every stage of the exhibition, from the mining of lithium used in batteries to dispatching the vehicles to EU ports, such as Rotterdam and Antwerp.
“Based on the investigation, the commission has concluded that the BEV [battery electric vehicle] value chain in China benefits from unfair subsidisation, which is causing a threat of economic injury to EU BEV producers,” it stated in a statement to accompany a legal decision published on Thursday.
The European Commission president, Ursula von der Leyen, informed Xi Jinping during the Chinese president’s recent stay in Europe that “imbalances” caused by state approval for Chinese industry, leading to artificially inexpensive products, threatened jobs in Europe, which was “a matter of great anxiety”.
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China, which has stated it is looking for a “mutually acceptable solution” to the dispute, is examining French cognac and pork imports over contributions, increasing the prospect of tit-for-tat measures. “It is plain for all to see who is escalating trade frictions and instigating a ‘trade war’,” the Chinese commerce ministry expressed last month.
China has succeeded a 25% share of the EU market for electric-battery-powered cars, up from 3% in 2020. EU officeholders fear that without action a European industry that operates 2.5 million people and 10.3 million in the broader supply chain could be seriously injured, just as the EU visited its solar panel businesses lose out to subsidised Chinese competitors.